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The Sky isn’t the Limit — the unfortunate truth about campaign finance limits

Global Integrity

August 10, 2016

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Tracking state-level developments in campaign finance

By Azeezat Adeleke, Sunlight Foundation, August 10, 2016 – The contents of this blog and the underlying research are the result of a partnership between Global Integrity and the Sunlight Foundation in relation to the State Integrity Investigation. This is the second post of a series of four – tracking state-level developments in campaign finance. First post here.

It’s no secret that those who wish to limit campaign contributions face constant challenges, as state legislators, courts, and executive officials propose, amend, repeal, and replace laws on campaign finance limits in an unceasing tide. Last year, Global Integrity and the Center for Public Integrity published the second round of the State Integrity Investigation, providing a comprehensive look at ethics and transparency in all fifty states. With a number of indicators on campaign finance, the index makes this dynamic landscape easier to understand.

Following the publication of the data, Global Integrity and the Sunlight Foundation partnered to explore how we could build on it, picking up where the State Integrity Index left off. We used the Index’s indicators on campaign finance limits to keep tabs on recent developments and examine which way the tide of campaign cash is headed. Sunlight’s methodology included grouping indicators and using Open States, Sunlight’s state legislative tracking tool, LegiScan, a compilation of state legislative websites, and news searches to find out whether and how states have made progress developing their reforms. We focused on whether limits on specific kinds of campaign contribution existed in law and in practice, and whether they have substantially changed over last year.

Sunlight found that 12 states modified their campaign finance limits: six in ways that strengthened them and six in ways that weakened them. This may seem like parity, but a closer examination shows that while the former bills are laudable, they pale in scope and power compared to the latter, the bills that reduce limits.

For an overview of developments – also in comparison with the State Integrity Investigation data, please see the table below. For notes on methodology, please see this post here.

More Money, More Problems?

Three state governments approved legislation that substantially increased the amount of money in their elections.

Arizona SB 1516, among other provisions, allows candidates to transfer unlimited funds amongst themselves, removes the limit on how much money a person can spend on a party for a candidate, and, in a strange rebranding effort, re-christens “Super PACs” as “Mega PACs.”

In Wisconsin, AB 387 (Act 117) repeals and replaces existing finance law by doubling most contribution limits for state offices and creating loopholes. For example, corporations, unions, and tribes are barred from donating to PACs, but may award unlimited donations to Independent Expenditure Committees (IECs). IECs, unlike PACs, cannot advocate for or against candidates by name, but they can still influence elections in general and referendums in particular.

Elsewhere, three states passed more minor provisions that will nonetheless weaken campaign finance limits.

In Connecticut, incumbents cannot use public money to create any material, like mailers or ads, that would advertise their candidacy in the months preceding an election. HB 5612 states that candidate activity with the Council of State Governments does not violate this prohibition.

In March, a federal judge ruled that Kentucky’s ban on political contributions from corporations was unconstitutional because the state didn’t also ban contributions from labor unions. In response, Kentucky extended the ban to unions, but it also began allowing corporations to create PACs and pay to administer them.

In North Carolina, HB 373 allows the Democratic and Republican caucuses in the legislature to create campaign committees to help re-elect their members. The committees will adhere to the same rules as political parties, meaning they can rake in unlimited contributions from lobbyists and corporations.

More money means more problems in multiple ways. When corporations can funnel money into political action committees, their power eclipses that of normal voters. As a result, elected officials may be more likely to support policy that benefits corporations with deep pockets. With more money in the system, officials will need to solicit larger donations just to keep up. Laws like the ones mentioned above, especially in Michigan, Arizona, and Wisconsin, only fuel the arms race.

Laying Down the Limits

Though the bills that restrict or clarify limits are less dramatic than those described above, they still create transparency in ways that rarely grab news headlines.

In California, AB 1544 clarifies the rule on behested payments, which are donations given to an agency at the request of an elected official. The bill states that such a donation does not count as a campaign contribution if it’s for a governmental purpose. SB 254 places a question on the November ballot asking whether voters want California to join an effort to overturn Citizen’s United.

In Maryland, HB 963 updates the law to apply existing campaign finance rules to political committees created to support or oppose ballot measures.

South Dakota’s HB 1099 clarifies that counties, towns, districts, and municipalities not already covered by state campaign finance law can apply it to their elections, widening the extent of regulation.

In Utah, HB 158 restricts candidates for school board and county offices from using campaign funds for personal use

Finally, New York demonstrates an important lesson in the power of public pressure. In January 2014, Governor Andrew Cuomo pledged to pass sweeping ethics reform legislation that year. It did not happen. In January 2016, Cuomo brought back the same rhetoric, pledging to close loopholes to limits and increase transparency. Meanwhile, advocates called for reform, especially as a string of high profile officials left Albany for federal prison.

In June of this year, Cuomo’s office released a legal opinion titled “Addressing Dark Money in Politics,” clarifying some limits on coordination between candidates and committees, while pointing to the need for more precise legal regulation in this area. Cuomo also pledged to push an accompanying bill, though his last-minute decision to act meant that the bill did not pass before the Assembly adjourned on June 16. If that public pressure remains into the next legislative session, perhaps Cuomo will act further. Several groups have kept the pressure on, including the Brennan Center, NY LEAD, and Fair Elections New York.

After all, while legislators, executive officers, and the courts have power over the limits, the public can still exercise its power over them. That begins with making your voice heard: if you’re displeased with this year’s legislation in your state, or wish to encourage your lawmakers to go farther, contact your state representatives and state senators and/or get in touch with the above organizations working on good governance in your state.

Did we miss something? Feel free to comment or send us your thoughts, suggestions, and feedback about the past year in political finance legislation to eshaw@sunlightfoundation.com or johannes.tonn@globalintegrity.org.